Bunnie Portfolio: Maybank-CA or Maybank-CB?
Monday, July 03, 2006
| Ex-Price | Mkt Pr | Maybank Pr | |
| Maybank-CA | 9.70 | 1.10 | 10.60 |
| Maybank-CB | 10.00 | 0.55 | 10.60 |
At a glance, Maybank-CB appears to offer a gearing of >20, which is double that of CA.
However, it is more likely to be an illusion.
Let's consider the 'what-if' situation of various Maybank prices and calculate the value of the options.
Premiums are ignored to simplify the calculation.
From the table, it appears that Maybank-CB offers slightly better return only when Maybank's price is more than RM12.00.
Given the short expiry date of both warrants, WINPULSE is of opinion that Maybank-CA is the better choice.
posted by winpulse @ 8:49 AM,
